In a recent development, Binance Nigeria Limited, a separate entity unaffiliated with the global cryptocurrency exchange Binance, has been issued a cease and desist notice by Binance. The move aims to dispel confusion stemming from Nigeria’s Securities and Exchange Commission (SEC) ban, which mistakenly led to reports suggesting that the renowned Binance exchange was banned in the country.
Binance, the world’s largest cryptocurrency exchange, promptly clarified the situation, stating that Binance Nigeria Limited has no connection to their operations. The Nigerian SEC, an independent regulatory body, had previously ordered Binance Nigeria Limited to halt the solicitation of crypto investments from the public, causing speculation about the ban’s impact on the real Binance.
The misunderstanding arose due to a practice similar to domain squatting, where individuals register companies using established brand names in hopes of selling them to the actual organizations. Ahassan Ifzal Mughal, the individual responsible for registering Binance Nigeria Limited, confirmed that the company has no affiliation with Binance and was registered for potential arbitrage purposes. Mughal expressed willingness to transfer full control of Binance Nigeria Limited to binance.com should the exchange decide to establish a legal presence in Nigeria.
Among the companies listed in Nigeria’s corporate registry, Binance Exchange Limited is one of four entities that include the term “Binance” in their company names. The individual responsible for registering Binance Exchange Limited has also registered several other cryptocurrency-related companies, such as Coinbase Limited, Paxful Nigeria Exchange Limited, Huobi Limited, FTX Nigeria Limited, and OKX Nigeria Limited, among others.
Despite a 2021 central bank ban prohibiting banks from servicing crypto exchanges, an estimated 22 million Nigerians, around 10% of the population, own cryptocurrencies. This surge in crypto ownership is attributed to rising inflation and strict foreign exchange controls in the country. Nigerians seek stablecoins like Tether USD as a means to safeguard their wealth amid the depreciating value of the national currency, the Naira, relative to the US dollar.
Binance, being accessible to Nigerians, remains a popular platform for peer-to-peer crypto trading in the country, particularly with the decline of Paxful, a major P2P crypto trading arena. Binance CEO Changpeng Zhao, also known as CZ, has emphasized the distinction between Binance and Binance Nigeria Limited, issuing a cease and desist notice to the latter entity to address the confusion surrounding the regulatory ban.
Binance have issued cease & desist notice to the scammer entity “Binance Nigeria Limited”.
Don’t believe everything you read in the news.
— CZ Binance (@cz_binance) June 18, 2023
As the situation continues to unfold, it is important for investors and the public to remain vigilant and rely on accurate information from reliable sources, refraining from believing everything they encounter in the news.